Sounding sceptical, the taxi driver explained that the taxi industry had remained unchanged for the last 30 years or so. He then showed some evidence of its stagnation: taxis had the same yellow and purple colour scheme; it was still illegal to tune radios in taxis; the taxi announcement system was never made functional; and taxis still displayed big notices on their cars. Skeptically, he claimed that the taxi booking system still relied on unreliable radio systems as well as drivers' memories; and although taxi "services" had not improved, taxi fares and costs had increased. To a certain degree, Leong is correct since the taxi industry has not changed very much over the years. In other words, the standard business model of the taxi industry has not changed, in spite of unprecedented technological advancements. Furthermore, there was little to indicate that there would be any change for the better in the near future. However, it is also true that previously unimaginable changes had occurred that would drastically change the existing taxi business models. Within the next two years, strategists would enter the industry to shake it up and provide travel services never before thought possible.
What are the technologies that are driving these possible fundamental changes in the existing taxi business models? The answer is simple: information and communication technologies. Indeed, these are not processes that are used to make products or services; they are the products or services that change the fundamental propositions of the business, removing traditional value swells and creating new digital ones. The taxi business model innovator or initiator is a unique entity: they are born here through a staggeringly massive collaboration of creative people.
Historical Overview of the Taxi Industry in Malaysia
Examining the roots of the taxi industry in Malaysia requires a look back into the yesteryears of the country, prior to its independence in 1957, when taxis were first introduced as a mode of public transport. Taxis were usually operated as a single business by owners who acquired the vehicles as capital investment. Unlike buses, whose service zones catered for the bulk of the commuters travelling for the nine-to-five office hours, taxis operated mainly for short journeys within towns or cities. Taxis were considered a luxury mode of transport for the general population, as their cost were comparatively high relative to the bulk of public transport modes – buses and trains. Initially, taxi service was an unregulated business. On-demand taxis operated like trade carts, where passengers were picked up from the street or roadside. Fares were not fixed and were subject to negotiation and agreement between the passenger and the cab driver. In the presence of competition, negotiated fares for a typical service, such as a taxi ride from the airport to the city were about 10 percent higher than bus fares for the same journey. In order to differentiate taxi service from bus service, taxis provided door-to-door service, with pick-up and drop-off at the respective origins and destinations specified by the passenger when making the reservation. With the growth of incomes and population in urban areas, demand for taxi service grew accordingly. As demand for this service outgrew supply, taxi operators began to introduce fixed fares for common routes such as the airport-hotel route. In 1978, the Land Public Transport Commission of Malaysia imposed regulations to control the taxi business in the country. The regulations imposed a number of conditions on the cab operators including fare levels, zones of operation, peak and off-peak service frequencies, as well as driver qualifications and dress codes. The service quality deteriorated and disgruntled passengers complained about poor and rude drivers. In view of the increasing dissatisfaction with the taxi service, the government decided to liberalize the taxi business in late 1990, which resulted in the taxi service growing increasingly attractive to self-employment and what have become known as "limousines", who provide similar luxury service at lower fares.
Top comments (0)